When recording foreign currency transactions or translating cash flows of a foreign subsidiary, a weighted-average exchange rate may be used if:
A) It approximates the actual rate at the date of cash flow.
B) It reduces the volatility in exchange rate fluctuations.
C) It leads to favorable results in the PL statement.
D) All of the above.

Question

Quizplus · Accepted Answer

A weighted-average exchange rate may be used when it approximates the actual rate at the date of cash flow, as it provides a reasonable estimate of the transactions over the period.

When Recording Foreign Currency Transactions or Translating Cash Flows of a Foreign